California Dept. of Finance wants $20 million to reduce government inefficiency

Amid the busyness of budget season, a lot can fall through the cracks.

One interesting budget nugget tucked into finance letters sent to the Legislature earlier this month included a $20 million request from the Finance Department to hire contractors to continue an ongoing effort to make state government more efficient.

H.D. Palmer, a Finance Department spokesperson, said the contractors would provide a “fresh set of eyes” on work done last year to identify ways to help departments save money. The Department of Health Care Services, the Department of Social Services and the California Department of Corrections and Rehabilitation were the focus of that efficiency investigation.

Any ways to improve processes or procurement strategies identified by this work will hopefully be expanded to other agencies, Palmer said.

The Finance Department said it hired the Boston Consulting Group to undertake last year’s review, which provided recommendations for how to streamline the state’s procurement process, reduce excessive administrative functions and consolidate vendors.

Palmer said the Finance Department pulled from its own budget to pay the $250,000 contract with BCG.

When asked if Boston Consulting Group produced documentation of the review, Palmer said consultants and state departments met regularly over several months. He said those recommendations were incorporated into the governor’s May Revision.

The request comes as lawmakers are considering tough budget decisions with California facing a $12 billion deficit. Gov. Gavin Newson has proposed several measures to address the budget crunch, including freezing state workers’ salaries and pausing Medi-Cal enrollment for undocumented residents of the state.

It’s no secret that public sector unions are not happy about departments hiring private contractors to do the work of state employees. In recent years, labor groups have filed complaints through the California employment board over departments hiring contractors for janitorial services and landmark legal battles.

The Legislature has until June 15 to pass a balanced budget and approve, or disapprove, the Finance Department’s request.